Internet of Things

Four Reasons Why Apple Watch Will Disrupt Existing Businesses

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Wired magazine in November 2014 had nine ads from watch makers like Rolex, Seiko and Swatch. These ads don’t look like they belong to this medium of high tech products Wired magazine represents.

So, why this big watch spectacle? The reason to publish these ads now is the upcoming release of Apple Watch early 2015.

Apple has an impressive track record for disrupting existing business models. Consider how iPod and iTunes changed music business. Nokia, Sony Ericsson and Motorola are no longer the giants they used to be. Apple’s iPad dominates tablet markets.

Do traditional and smart watch manufacturers have anything to fear? Here are four reasons why Apple Watch will disrupt not only watch business but a few other businesses as well.

1. Apple Watch Will Build On Top of a Large Ecosystem

Apple Watch will closely operate with iPhone. Apps in iPhone can be extended to support Apple Watch by using WatchKit API (Application Programming Interface). For example, Apple Watch can receive notifications from iPhone. User can quickly glance watch to check the status provided by a specific app.

Watch owners can download and purchase Apple Watch enabled apps from Apple’s AppStore. Apps enabled for Apple Watch will soon appear in AppStore and in very different fields:

  • Home automation: Apple Watch will be a remote control for many devices via Apple Home, including music loudspeakers.
  • Mobile payments: Apple announced 2014 Apple Pay which can be used with Apple Watch. Payments at shops will be quick and will happen just by tapping Apple Watch.
  • Healthcare: Apple Watch has a fitness monitor and it can also monitor heart-rate. These measurements are delivered to Apple Health platform.
  • Social apps: Apple Watch users can exchange messages with each other. You can send ‘taptic’ feedback to another Apple Watch user.

2. API Economy Will Expand To Watches

Basic ingredients for a successful ecosystem already exist for Apple Watch:

  • AppStore for distributing and monetizing apps and easy access to new apps
  • WatchKit API for app developers
  • Payment system for apps

Apple is not starting from a scratch but can instead rely on a large pool of existing iOS apps and their developers.

The new way to integrate mobile apps with wearables will create surprising apps, and definitely new business models will emerge. TapSense announced recently a programmatic ad platform for Apple Watch. Similar announcements for various types of platforms around Apple Watch will soon follow.

3. Apple Watch Opens Quantified Self Movement to Larger Public

As wearables targeted for fitness measurements have emerged, Quantified Self movement has gotten more ground with early adopters. Fitbit, Jawbone UP and Nike dominated this market in 2014.

Jawbone UP and FitBit extensively apply big data analytics. They provide analytics reports for their respective users in mobile and web.

Apple has taken a different approach with analytics: data collected to Apple Health platform can be analyzed by third-party apps provided the user has authorized the access for these third-party apps.

4. Fashion Industry Meets Electronics

“One size fits all” has been the mantra for smart watch makers.

Apple will change this principle as there will be many sizes and product lines for Apple Watch. Apple Watch comes in two sizes and has different ‘editions’, even a 18-carat gold watch.

Smart watch will actually become a fashion statement, not just any device chosen by its technical features. Hence other smart watches like Samsung Gear will need to focus on the smart watch design.

What Happens Next?

If history repeats at all itself, Apple Watch will be a major success. First there will be complaints about watch size, battery lifetime and pricing. Yet improvements and innovative features will pop up in subsequent releases.

Luxury Swiss watches like Rolex will definitely survive, nevertheless mid-tier watches without smart features may have harder time. Other smart watch manufacturers will start paying attention to the design and ecosystem with apps.

Apple Watch appears to be a small step. In fact, it is a door opener into API economy and a big step for introducing Internet of Things to consumers.

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